Alberta outsourcing health-care services, axing 11,000 jobs as part of multi-year plan to control spending

a man wearing a suit and tie: Health Minister Tyler Shandro.

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Health Minister Tyler Shandro.

EDMONTON — Even as the COVID-19 pandemic shows no signs of abating, the Alberta government is forging ahead with a multi-year plan for cuts to ancillary health-care services, including privatizing laboratory work and laundry services, with the aim of saving some $600 million annually.

The United Conservative Party has long promised to rein in provincial spending and, by extension, get a grip on health-care spending, which has an operating budget in excess of $20 billion and accounts for 42 per cent of government spending.

The cuts announced Tuesday amount to 11,000 jobs over the next few years, some 9,700 of them from services such as laundry and food preparation, and a further 1,300 care and support staff because of attrition.

Alberta health minister Tyler Shandro said there will be no cuts to frontline medical staff during the pandemic; any job losses to such staff will come as the result of attrition, or under “existing initiatives.”

“This approach will ensure Alberta’s pandemic response remains our top priority,” Shandro said.

The Alberta government sees the latest round of cuts as complementary to another government promise — to tackle wait times, which have grown during the pandemic. Last month, Shandro said they were going to “keep that promise, pandemic or no pandemic.”

The government predicts the changes would save $600 million annually, and savings would be put back into patient care. The cuts would total roughly 2,000 laboratory jobs, 4,000 housekeeping jobs, 3,000 food service jobs and 400 laundry jobs.

Shandro said 68 per cent of laundry services and 70 per cent of laboratory services are already contracted out. The cuts to housekeeping and food preparation won’t come until Alberta Health Services (AHS) develops a business case for each, due in 2022 and 2023, respectively.

“This looks like, really, standard-type management reorganization within the health-care sector,” said Rosalie Wyonch, a policy analyst at the C.D. Howe Institute. “It’s not so much that there’s now $600 million that can be spent elsewhere, it’s that this action will prevent $600 million being spent.”

Dr. Michael Rachlis, a professor at the University of Toronto in the Dalla Lana School of Public Health, said it’s possible the initiative will save money, but there are catches.

“Without a detailed analysis we don’t know if there’s actually going to be money saved or not. AHS will still be paying for laundry, it just won’t be done by AHS employees,” Rachlis explained.

Any cuts to health-care services or changes to health care more broadly, have become a flashpoint during the COVID-19 pandemic.

Shandro has been involved in acrimonious negotiations with the Alberta Medical Association regarding physician pay and extra billing. There has also been a substantial back-and-forth between the government and doctors about whether or not physicians are absconding to sunnier pastures.

As well, the province has a plan to allow private surgical clinics to try and clear out a backlog of surgery patients, another promise of the UCP.

“Is there any evidence that privatizing the surgery would save any money? It might, but there’s a compelling case that suggests it might not,” said Rachlis.

The Alberta government, according to its August fiscal update, spent $2.5 billion on its pandemic response.

John Church, a professor of political science at the University of Alberta who studies health policy, pointed out that the push for more private medical treatment in the province “isn’t new for Alberta.”

“The tactical advantage here is that they’re counting on a population that has bought into the ideology that they’re pitching. And historically, they’re actually fairly accurate,” Church said.

The New Democrat opposition party has repeatedly attacked Jason Kenney’s government for moving towards what they see as “American-style” private health care.

NDP leader Rachel Notley, called the Tuesday health-care cuts “completely irresponsible.”

With files from the Edmonton Journal and The Canadian Press

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